TYPES OF FORECLOSURE IN PORTLAND, OREGON

The procedures surrounding foreclosure differs depending on the type of lien involved.  The three most common types of foreclosure procedures in Portland are:

Trust Deeds

A trust deed is a type of mortgage that the owner of the property gives a trustee who then holds power to sell the property to repay a loan for the benefit of a lender.  A trustee is commonly used by banks and other lenders.   A trust deed is foreclosed by lawsuit in a court.  The holder of the lien requests a judgment against the owner for the outstanding amount on the loan and also any legal fees incurred.  The sheriff for the Portland County will auction off the property to the highest bidder if the owner is unable to pay the amount imposed.   If the auction does not produce enough cash, the owner may be ordered to pay off the rest and has to move off the property immediately.

After the sale, the owner may buy back the property from the buyer within 180 days a process which is referred to as “right of redemption”.  If the owner of the property wishes to buy it back, a notice must be served to the buyer outlining the amount, the date and time that payment will be made to the sheriff.  This notice must be served no longer than 30 days or less than 14 days before the payment date.

Mortgages

In this case, the owner gives the lien on the property to serve as security for a loan.  A mortgage is foreclosed through lawsuit in a circuit court in Portland.  The foreclosure process is handled in the same way as a trust deed.  The difference is that no money can be collected from the owner after foreclosure.

Land Sale Contracts

This is a contract between the buyer and the seller of property.  In this situation the seller gives the buyer a deed to the property once full payment has been made.  The seller has three rights:

• He can file a lawsuit claiming the unpaid balance of the contract plus other fees.
• The seller may remove the buyer’s interest in the property.  The seller regains the property and the buyer must pay all attorney fees and foreclosure costs.
• Forfeiture – the seller send notices to the buyer and other interests explaining the amount of debt and a forfeiture date.  If the buyer does nothing, his interest is eliminated and he should move off the property immediately.  He can however, stop this process by paying off his debts plus attorney fees.  The seller then has to file a notice that the process was terminated.